Jobs created from stimulus must go to Americans

Job creation spurred by growth in the “green” industry provides a shining light that may bolster a sluggish U.S. economy. A study issued by Pew Charitable Trusts reported green jobs in the U.S. grew nearly two-and-a-half times faster than overall jobs between 1998 and 2007.

Experts predict that trend to continue in Pennsylvania with the generation of 115,000 jobs between 2010 and 2012 as a result of an anticipated $10 billion private and public investment in the green economy, according to January 2010 “The Pennsylvania Green Jobs Report.” 

The largest clean energy investment in U.S. history — $110 billion made through the American Recovery and Reinvestment Act of 2009 (ARRA) — will, in part, support research and development of advanced clean energy technologies and invest in the domestic clean energy manufacturing sector.

But dark clouds threaten to dim that light.

An independent report issued by The Investigating Reporting Workshop states that 79 percent of the $2 billion in grants doled out by the clean-energy program in the stimulus so far went to foreign companies.

One of the most recent examples is a $450 million grant from ARRA to construct a $1.5 billion 600- megawatt wind farm in West Texas. Project organizers tout creation of 2,800 jobs, yet the U.S. will see only 15 percent of those jobs. According to the New York Times, the project will generate just 330 jobs in the U.S. — 300 of which are temporary.

“Investing in renewable energy could help lessen our reliance on traditional forms of energy and create hundreds of thousands of green jobs in the process, but make no mistake — those jobs need to be located in the United States of America,” says Darlene J. Robbins, president of the Northeast Pennsylvania Manufacturers & Employers Association. “Renewable energy (including wind, solar, biomass, hydroelectric, biofuels, and geothermal) represents just 7 percent of the total U.S. energy portfolio despite a dramatic surge in biofuel and wind energy production from 2000 to 2007. If the purpose of green energy is to become less reliant on foreign countries, then why are we relying on foreign countries for the technology and labor for alternative energy projects?”

Robbins believes investments must focus on getting Americans back to work at the same time we are spending, investing and improving America’s ability to compete.
America’s ability to compete for green jobs brings up issues that continue to draw controversy such as mandates, free trade and “Buy American.”

“Our goal is to create jobs here in the United States and here in Pennsylvania, (but) you can’t mandate that,” says Gene Barr, vice president of government and public affairs for the Pennsylvania Chamber of Business & Industry (PCBI). “Government making decisions about where the jobs are is not the best way of approaching this. If you say to somebody ‘we have to buy your product’ and you have a captive audience, it really cuts down on what the competition can be. Our market doesn’t work that way.”

PCBI believes mandates create unintended barriers, higher costs and fewer jobs.
“You have to create an atmosphere here in Pennsylvania and the U.S. where companies can thrive,” says Barr. “What we have to do is drop a lot of the barriers that we have to prosperity. It really makes no sense to say you should build it here. In reality, that will cost taxpayers and consumers more money.”

State barriers include a high corporate net income tax and challenging legal and labor environments. Businesses that employ 50 employees also face additional federal mandates that create a deterrent for job and economic growth.

Other organizations believe less government intervention and spending would help domestic businesses compete in the global market.

“The idea that the government knows better about what the next generation sources of energy are going to be to power our economy is just nonsense,” says David N. Taylor, executive director of the Pennsylvania Manufacturers’ Association. “Gov. Rendell established this slush fund for green energy venture capital. The whole concept of venture capital is based on risk. The state can spend with impunity. If that big investment fund leads to nothing, what’s the consequence?”

Taylor believes state policy changes such as uncapping the net operating loss carry forward would provide more benefit for growing the green industry.

“You can free up an enormous amount of potential capital for research and development if you made that simple, common-sense tax change to bring Pennsylvania into alignment with the rest of the country and the federal tax code,” he says. “These technologies need to prove themselves and it just defies common sense to engage in this campaign of subsidization. It’s inherently wasteful and it’s the last thing we can afford is to raise people’s taxes and raise people’s energy sources at the same time. We have to create a more pro-growth environment for business so we can unleash the ingenuity and creativity of the American people.”

Some lawmakers also work to keep American jobs and limit government investment funds to purchase overseas labor and products.

“It’s simple: The American Recovery and Reinvestment Act should reinvest in America and help America and American workers recover,” says U.S. Sen. Robert P. Casey, Jr. (D-Pa.). “For example, one wind turbine manufacturer in Pennsylvania laid off workers last year because they didn’t have enough orders. Thanks to a Recovery bill project announced earlier, some of those Pennsylvanians will be hired back. If we increase work orders, we can put Americans back to work."

Sen. Casey has joined with other legislators to secure a moratorium on all payouts from a clean-energy grant program until Congress can consider a proposal that such funds flow only to projects that rely on materials manufactured in the United States and create the bulk of their jobs the United States.

"Green jobs can help put America on the path to a cleaner, more energy efficient future," says Casey. "As we take the steps necessary to recover economically, we must remember that today’s investment in green jobs is also a down-payment on tomorrow’s global competitiveness."

That global competitiveness looks bleak.

According to a report by the Apollo Alliance, the U.S. currently imports about 70 percent of its renewable energy systems and components. If that trend continues, America stands to lose an estimated 100,000 clean energy manufacturing jobs by 2015 and nearly 250,000 by 2030.

"The most important thing America can do to drive investment in green industry, create high-quality green jobs and promote long-term economic prosperity is to enact a comprehensive national climate and clean energy policy akin to the American Clean Energy and Security (ACES) Act, which was passed by the U.S. House of Representatives in June 2009," says Sam Haswell, spokesman for Apollo Alliance. "A cap on carbon and a renewable energy standard, both of which were contained in ACES, would generate unprecedented demand for clean energy equipment such as solar panels, wind turbines, electric car batteries and other clean energy components and systems."

Haswell believes additional steps are needed to create investment in the U.S. domestic manufacturing sector.

The Alliance supports adoption of the Investments in Manufacturing Progress and Clean Technology (IMPACT) Act, a proposal that would, in part, provide $30 billion to establish state-administered revolving loan funds to assist small- and medium-sized manufacturers retool to produce clean energy component parts and become more energy efficient.

"In the short-term, Sen. (Sherrod) Brown’s (D-Ohio) IMPACT Act would create 2.7 million American jobs at a time when we sorely need to put our citizens back to work and get our country back on solid economic ground," says Haswell. "Over the long-term, domestic manufacturing investments and comprehensive clean energy policies will help the U.S. regain its foothold as a global clean energy leader."

According to Haswell, most renewable energy analysts predict the clean-tech sector will grow in worldwide revenue from $116 billion to $325 billion over the next decade, making it the largest single industrial sector in the world. Workforce and infrastructure investments will increase U.S. opportunities to share in that revenue.

Yet how that investment happens continues to draw controversy.

"Policymakers are choosing winners and losers and picking industries that are winners and losers in alterative energy race," says Kevin Shivers, state director for the National Federation of Independent Business, Harrisburg. "Government is going in the wrong direction. We’re raising the cost of doing business. At a time when our unemployment has approached its highest levels in 30 years, we should be looking to figure out a way to help all job creators. It’s extraordinary how government today is hamstringing growth and innovation and selecting those industries that succeed and those industries that fail."

Shivers believes wasted federal stimulus dollars force state and federal lawmakers to find other revenue sources that punish home-grown businesses and put them at a global competitive disadvantage.

Creating a global competitive advantage in the nation’s green industry is the focus of a report issued by the Apollo Alliance and Good Jobs First in March, Winning the Race: How America Can Lead the Global Clean Energy Economy.

"What the report argues is that there’s a need for comprehensive and extensive clean and renewable energy policy in the United States that would encourage further investment in the U.S.," says Philip Mattera, research director for Good Jobs First, Washington, D.C. "The question is what else needs to be done to create the kinds of favorable conditions in the U.S.?"

Good Jobs First supports government investment in the clean energy industry provided it creates quality jobs.

"We want to make sure that those subsidies are used to create quality jobs," says Mattera. "What we need is to make sure that we’re pursuing both the environment objectives and the employment objectives at the same time. That’s why the employment safeguards are important to do things to try to keep as many of the jobs as possible in the US and to make sure that those jobs are paying decent wages so that the workers there can support their families and contribute to the economy and help stimulate overall economic activity."

Economic activity in northeastern Pennsylvania has seen some of that stimulation with the construction of a solar park in Carbon County, expansion of a wind farm in Schuylkill County and plans for another wind farm in Wyoming County.

"We have got several projects in our region that are at least looking at construction jobs and also some full-time jobs directly related to alternative energy products," says Mark Carmon, community relations coordinator for the Northeast Division of the Pennsylvania Dept. of Environmental Resources. "(The green job industry) has been growing and it will continue to grow as those opportunities increase. Those opportunities have grown as more companies look at constructions practices, equipment purchases and as more residents, businesses and government agencies review options to decrease their energy bills."

Carmon sees more residents and businesses investigating solar and wind technologies to save energy costs and believes that interest will create increased demand.

"It’s not revolutionary; it’s evolutionary," he says. "It’s a worldwide competition with China, Spain and others for solar, wind energy equipment and production. It’s an international marketplace and we’re trying to position ourselves to not only attract business but provide an atmosphere or environment that is conducive to production and sale and use in Pennsylvania."

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